CIM Dividend
Although CIM has a dividend of 0.50 with an ex-dividend date of Mar 28, you can sell covered calls on Chimera Investment Corp to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):
| Chimera Investment Corp (CIM) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 18.62 | 18.70 | 18.66 | +0.12 | 1.0M | 6.0 | 3.5B |
CIM Dividend-Like Income Using Covered Calls
With CIM at 18.66, here's a table showing how big the annual "dividend" (ie. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:
| Annual Yield | Annual Premium | Cents/Day |
|---|---|---|
| 3% | 0.56 | 0.2 |
| 5% | 0.93 | 0.3 |
| 10% | 1.87 | 0.5 |
So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:
| 3% Yield On CIM Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Mar 15 | 19.00 | 0.05 | 22 | 0.2 | 0.30 (1.6%) | |
| Apr 18 | 19.00 | 0.10 | 56 | 0.2 | 0.30 (1.6%) | |
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| Top 10 Open Interest For Mar 15 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | SPX dividend | 6. | EWZ dividend | 1. | AMRN dividend | |
| 2. | EEM dividend | 7. | GE dividend | 2. | FIT dividend | |
| 3. | SPY dividend | 8. | LLY dividend | 3. | ASND dividend | |
| 4. | QQQ dividend | 9. | BAC dividend | 4. | IMGN dividend | |
| 5. | FXI dividend | 10. | GLD dividend | 5. | OSTK dividend | |
Want more examples? CIG Dividend | CINF Dividend
